The Department of Trade and Industry (DTI) has echoed the call of business groups for the creation of a competition body because this would strengthen the government's consumer welfare protection program.
Victorio Mario Dimaginba, director of the DTI Bureau of Trade Regulation and Consumer Protection (BTRCP), said it does not matter if the competition body will be under the Department of Justice (DOJ), just like in the case of the United States, or a separate and independent agency as what most Southeast Asian countries have,
"We will welcome it even if it is under the DOJ or a separate body. What is important is the mandate," Dimagiba told the BUSINESSMIRROR.
He said Trade Secretary Gregory Domingo has already informed law makers of the department's support for the immediate passage of a competition law that will ensure that expansions, mergers and acquisitions will not result in market control for certain firms.
"This is important now that mergers and acquisitions are becoming a trend," Dimagiba said.
Local and foreign business groups have also aired similar appeals for the creation of a unified and independent commission that will implement the country's competition laws.
Benjamin Philip Romualdez vice president of the Philippine Chamber of Commerce and Industry, said Filipino businessmen are looking forward to the final contents of the country's new comprehensive competition law that will clearly guide fair trade practices and the behavior of firms.
Particularly, Romualdez said provisions on mergers and acquisitions (M&Es) should be strengthened as a result of the new legislation.
"The issues can start there [referring to M&Es]. Aside from just the business operations and how they should be regulated, we should begin in the establishment and expansion of businesses," Romualdez said.
Henry Schumacher, executive vice president of the European Chamber of Commerce of the Philippines (ECCP), said how a country promotes fair competition and corporate governance is an important consideration of investors in looking at a destination.
"What we want is fair competition, level-playing field and it is essential that the consumers are protected. The ECCP is now involved in anticorruption initiatives and there is a link because cartel like behavior is being considered as corruption. That is why we think this is an important piece of legislation. It should have all the elements that need to be looked at and the best practices in Europe and Asean should be considered," he said.
He said the competition law should have a clear language on what is a cartel-like behavior and monopoly and the exemptions allowed.
Dimagiba said the legislation is now at the committee level of both the Senate and House of Representatives. The technical working group in the House has already concluded its work.
He said the competition law and competition body would help the DTI a lot in its consumer welfare responsibility.
Illegal schemes like cartel and profiteering, Dimagiba said, will be clearly defined and monitored and will become part of undue price manipulation. These schemes will be considered as combination of acts in restraint of trade.
He said with the competition body scrutinizing cases of profiteering and cartel at the corporate level, the BTRCP will be able to concentrate on how consumers will be protected.
Source: Business Mirror; The Economy; 25 April 2011